Asymmetric Gasoline Price Effects on Public Transit Ridership: Evidence from U.S. Cities

Abstract

Using a nonlinear autoregressive distributive lag framework, the paper examines the dynamic effects of gasoline price, gasoline price volatility, income, and transit service coverage and frequency on public transit ridership in six U.S. cities (New York City, Chicago, Los Angeles, Boston, San Francisco, and Cleveland). The results indicate that, in the long run, rising gasoline prices increase transit ridership in all cities. More importantly, transit riders react differently, depending on the direction of gasoline price movements. The variable corresponding to price increases is found to have a larger elasticity than that for price decreases in five out of six cases, supporting gasoline price asymmetry. In Chicago, Los Angeles, Boston, and Cleveland, a small but statistically significant long-run effect of gasoline price volatility on transit ridership was found, suggesting that gasoline price uncertainty is an important factor affecting transit ridership in these cities. In the short run, transit service coverage is found to be the key determinant of transit ridership, implying that expanding transit service coverage can boost public transit ridership in the short term.

Is the Price Elasticity of Demand Asymmetric? Evidence from Public Transport Demand

“…Price asymmetry has been tested for in the fields of economics, psychology and marketing ( Bidwell et al, 1995 ;Farrell, 1952 ;Gately, 1992 ;Heidhues and K őszegi, 2008 ;Kalyanaram and Winer, 1995 ;Mazumdar et al, 2005 ;Winer, 1986 ), as well as in agriculture and banking (see also : Chen et al, 2004 ;Hannan and Berger, 1991 ;Neumark and Sharpe, 1992 ;Panagiotou and Stavrakoudis, 2015 ;Pick et al, 1990 ;Ward, 1982 ). In transport the focus has mostly been on demand asymmetries with respect to gasoline prices ( Chi, 2022 ;Hymel and Small, 2015 ;Kwon and Lee, 2014 ). Interestingly, Chi (2022) is the only study which proposes loss aversion as one potential explanation for the presence of demand asymmetries.…”

“…In transport the focus has mostly been on demand asymmetries with respect to gasoline prices ( Chi, 2022 ;Hymel and Small, 2015 ;Kwon and Lee, 2014 ). Interestingly, Chi (2022) is the only study which proposes loss aversion as one potential explanation for the presence of demand asymmetries.…”

“…Transport for London is a public monopoly and as such there is no competitor and there are no sales campaigns comparable to the marketing of a for-profit good. Finally, public transport fares are not subject to price volatility, unlike, for example, gasoline prices ( Chi, 2022 ;Kwon and Lee, 2014 ) as they change at predictable times and by predictable magnitudes. Any demand reactions to fare changes are therefore very likely to be pure price effects.…”

Estimating the Lag Time Between Flight Arrivals and Parking Exit Volumes at a Major Airport: A Practical Approach

“…In recent years, it has been widely applied in fields such as monetary economics [22], housing prices [23], energies [24], air pollution [25], etc. Moreover, it has gained popularity in transportation research for investigating the relationship between transport and socioeconomic variables (see [26], [27], [28], [29], [30]). Our methodology adopts distributed lag models to depict the dynamic causal relationship between the number of arriving flights and exiting vehicles.…”